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This paper develops a novel econometric framework for static discrete choice games with costly information acquisition. In traditional discrete games, players are assumed to perfectly know their own payoffs when making decisions, ignoring that information acquisition can be a strategic choice. In the proposed framework, I relax this assumption by allowing players to face uncertainty about their own payoffs and to optimally choose both the precision of information and their actions, balancing the expected payoffs from precise information against the information cost. The model provides a unified structure to analyze how information and strategic interactions jointly determine equilibrium outcomes. The model primitives are point identified, and the identification results are illustrated through Monte Carlo experiments. The empirical application of the U.S airline entry game shows that the low-cost carriers acquire less precise information about profits and incur lower information costs than other airlines, which is consistent with their business model that focuses on cost efficiency. The analysis highlights how differences in firms’ information strategies can explain observed heterogeneity in market entry behavior and competition.

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This paper studies the determinants of equilibrium multiplicity and uniqueness in continuous-time dynamic discrete choice games. We focus on a simple dynamic duopoly model of entry and exit where firms make decisions at stochastic sequential times governed by independent Poisson processes following Arcidiacono, Bayer, Blevins, and Ellickson (2016, Review of Economic Studies). We derive two sufficient conditions for uniqueness based on establishing contractivity of the equilibrium Bellman system. The first applies to the general model when the discount rate is sufficiently high. The second focuses on the case of symmetric switching costs and yields a sharper contraction condition. To evaluate the practical implications of these conditions and to explore the sources of multiplicity, we conduct a large-scale numerical search for equilibria across 10 million uniformly drawn parameter vectors. We find a unique equilibrium in over 90\% of configurations. Our results show empirically how multiplicity is related to strategic incentives in dynamic duopoly models such as patience, competition intensity, and switching costs. In particular, multiplicity arises when competition is intense enough that duopoly is not viable.

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This paper studies the strategic and economic implications of a durable goods manufacturer’s entry into the secondary market. We specifically focus on the recent entry of Korean domestic automobile manufacturers into the used car market in South Korea, where a recent government policy change authorized manufacturers to operate the secondary market, which was previously prohibited. We utilize a comprehensive dataset of the Korean automotive market, and estimate the demand for new and used cars to analyze the trade-off between the cannibalization effect and the resale value effect. We find that the manufacturer’s entry into the secondary market increases the demand for used cars, while the potential cannibalization effect on new car sales is negligible. Moreover, we find that the policy intervention results in a consumer welfare gain of $298 on average, primarily driven by the reduction in information asymmetry and the provision of quality assurance. Our findings suggest that manufacturer’s entry into the secondary market does not necessarily have negative effects on primary market demand. Instead, it serves as a strategy that stabilizes resale values and enhances overall brand reliability.